Below expectations. Reported 3Q08 net profit of US$5.7m (-14.7% yoy) came in below SGX estimate of S$7.5m due to lower-than-expected gross margins and interest income, and a greater-than-expected operating expenses. 9M08 net profit of US$19.7m represents 64% of our previous full-year estimate.

Sales grew 27% yoy to S$124.4m in 3Q08. Revenue for 3Q08 rose to
US$124.4m (+26.9% yoy), compared due to an increase in container volume
handled and rates for its container shipping business. Container volume handled grew 10.7% to 410,000 teus in 3Q08.

Slashing FY08 forecast, but keeping FY09-10 numbers. SGX have cut their FY08 estimate by 19% to adjust for the lower-than-expected 3Q numbers, reduced volume assumption of 2% but kept the higher cost assumptions unchanged.

Maintain Buy. SGx kept FY09-10 forecasts intact. The DCF derived target price is lowered to S$0.19 (from S$0.20) taking into account of a higher risk premium.